Chapter 4 Study Guide

Chapter 4 Study Guide - CHAPTER 4 COMPLETING THE ACCOUNTING...

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CHAPTER 4 COMPLETING THE ACCOUNTING CYCLE STUDY OBJECTIVES 1. PREPARE A WORKSHEET. 2. EXPLAIN THE PROCESS OF CLOSING THE BOOKS. 3. DESCRIBE THE CONTENT AND PURPOSE OF A POST-CLOSING TRIAL BALANCE. 4. STATE THE REQUIRED STEPS IN THE ACCOUNTING CYCLE. 5. EXPLAIN THE APPROACHES TO PREPARING COR-RECTING ENTRIES. 6. IDENTIFY THE SECTIONS OF A CLASSIFIED BALANCE SHEET. *7. PREPARE REVERSING ENTRIES.
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CHAPTER REVIEW Preparing a Worksheet 1. (S.O. 1) The steps in preparing a worksheet are: a. Prepare a trial balance on the worksheet. b. Enter the adjustments in the adjustments columns. c.Enter adjusted balances in the adjusted trial balance columns. d. Extend adjusted trial balance amounts to appropriate financial statement columns. e. Total the statement columns, compute the net income (or loss), and complete the worksheet. 2. A worksheet is a multiple-column form that may be used in the adjustment process and in preparing financial statements. The basic form of a worksheet consists of the following columns: Balance Sheet Dr. Cr. Dr. Dr. Dr. Dr. Cr. Cr. Cr. Cr. Income Statement Adjusted Trial Balance Account Titles Trial Balance Adjustments 3. For each account in the worksheet, the amount in the adjusted trial balance columns is equal to the account balance that will appear in the ledger after the adjusting entries have been journalized and posted. 4. After the worksheet has been completed the statement columns contain all data that are required for the preparation of financial statements. The income statement is prepared from the income statement columns, and the owner’s equity statement and balance sheet are prepared from the balance sheet columns. 5.
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Chapter 4 Study Guide - CHAPTER 4 COMPLETING THE ACCOUNTING...

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